In this course we explore cash flow forecasting at its most basic level. We assume little or no forecasting experience by participants, or a desire to improve their cash flow forecasting. We begin with a description of a common structure for cash flow forecasting and then fill in the pieces – information, sources, etc. – that are necessary for an effective forecasting system. We discover that most short-term forecasting methods are not complicated. We discuss how to identify potential sources both personal and computer. We break down data to explore how valuable data items are to the overall forecast. Acknowledging that we may not be able to find sources for all items, we introduce short-term forecasting methods that can be used in conjunction with estimates from “knowledgeable” sources. Cash flow is critical for the success and sustainability of a business
Income statements
Balance sheets
Cash flow statements
Why cash flow differs from profits
Presentation fundamentals
Cash and cash equivalents
Operating cash flow
Investing cash flow
Financing cash flow
Methods in calculating operating cash flow
Direct versus indirect methods
Reporting non cash transactions
Trade-off between liquidity and profitability
Conservative working capital management
Aggressive working capital management
Sources of cash
Cost of funds
Use of short term and long term debt
Working capital optimization
Cash conversion cycle
Accounts receivable factoring, pledging and assignment
Suppliers early payment discount
Liquidity and financial flexibility
Restricted cash and cash equivalent
Gross versus net cash flow reporting
Healthy cash flow
Interest income and dividends from debt and equity investments
Interest expense and taxes paid
Receivables and bad debts
Why to forecast cash flow
Cash management
Who is involved
Investing and financing decisions
Free cash flow
External financing index ratio
Cash sources component percentages ratio
Financing policies ratio
Operating cash index ratio
Operating cash inflow ratio
Operating cash outflow ratio
Long-term debt payment ratio
Productivity of assets ratio
Cash flow adequacy ratio
Reinvestment ratio
Dividends pay-out
Interpret the relationships between cash flow statements, income statements and balance sheets
Recognize the importance and elements of an organization's cash flow
Prepare cash flow statements using direct and indirect methods
Describe the impact of working capital management on cash
Analyze liquidity and the cash flow position of organizations including free cash flow
Review cash flow key presentation topics
Apply cash flow forecasting techniques
Apply ratio analysis related to cash flow
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